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After at least three years on the market, Surety Bank of Fort Worth has signed a deal to be acquired by the First National Bank in Graham for $8.7 million.

Surety, the smallest bank in Fort Worth, has been near a sale several times before. The only remaining obstacle at this stage is a standard 15-day comment period required by the Department of Justice, said Jerry Weiner, chairman of Surety Capital Corp., the bank's holding company.

Surety Bank has been for sale for at least three years, and operating under a cloud of litigiousness and conflict for at least as long.

Conflict spilled over from the boardroom to the balance sheet. Surety posted a $1.1 million net loss in 2007, after eking out annual profits of $465,000 and $183,000 in 2006 and 2005.

Five years ago, Surety had six branches. It had sold off all but the Summit Avenue headquarters by 2006.

Even so, many potential buyers looked at Surety as a way to get into the still-growing Fort Worth banking market and for its prime location near Interstate 30 and Summit Avenue, just south of downtown and near the city's cultural district.

"Every time you would get close to some kind of transaction, there would be a hiccup and the deal would be off," said Jacob Thompson, managing director at Commerce Street Capital, which advised Surety on the deal.

The buyer is the largest bank in Graham, a town of about 9,000 located 85 miles west of Fort Worth.

First National Bank in Graham, a $156 million West Texas bank, is also the biggest bank owned by holding company First Graham Bancorp Inc., which also owns First Security Bank in Flower Mound. Chuck Rosebrough, president of First Graham Bancorp, declined to comment on plans for Surety, noting that the deal had not yet closed.

Before the Graham deal, about 40 interested parties received offering memos on Surety, Thompson said.

And in the past three years, the bank received 14 viable purchase offers, said Weiner, who stepped in as the chairman of Surety's holding company in October.

Last May, a group that was set to buy Surety for about $11 million called off its purchase. Pax Holdings Inc. was affiliated with a now-defunct title company in Southlake called Will Rogers Texas Title.

Two big issues limited the appetite of those potential buyers: $6.5 million in debentures and a former chairman with a reputation for suing.

The former chairman of Surety Bank, Dick Abrams, remains one of the largest shareholders in Surety Capital Corp., Surety Bank's holding company. But he was barred in June by the Office of the Comptroller of the Currency from engaging in banking and leading the holding company.

The number of shares owned by Abrams is in dispute, but Surety's bankruptcy filings describe Abrams as one of the corporation's largest shareholders and notes that his son, girlfriend and family trust are also significant shareholders. Abrams could not be reached for comment.

Abrams stepped down on Oct. 1 as Surety Capital Corp's chairman. Weiner, another shareholder in the bank, took that role on the condition that Abrams promise not to sue him, Weiner said.

Says Thompson: "He volunteered to do the job that nobody else wanted."

Since then, Weiner has focused on getting the institution sold and getting investors' money out of the institution.

The company's bankruptcy petition to sell to First National in Graham blames Abrams for Surety's predicament.

"The debtor was mismanaged for a long period of time by its former chairman ...." the petition states.

The bank is not profitable, but that's not because of its financial activities, Weiner said. Surety Bank in 2007 had $1.3 million in expenses beyond financing costs, employee costs and equipment costs. Its largest debtor after the debenture holders and former chairman Abrams is Bracewell & Giuliani law firm.

First Graham offered up the $8.7 million purchase price as a stalking horse bid. Surety initially received two other offers of at least $125,000 more than that amount, one bidder rescinded its bid and the other dropped its price lower than Graham's after the due diligence phase.

So-called stalking horse bids are initial bids to buy a bankrupt company from a buyer selected by the bankrupt company. It is designed to allow the distressed company to avoid low bids on its assets. A pledge from First Graham to buy deposit credits from Surety brings its practical purchase price to $8.8 million for the bank, which has a book value of about $5.7 million.